Summary information from the financial statements of two companies competing in the same industry Problem 13-5B follows. Comparative ratio analysis P3 Required 1. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turn- Check (1) Fargo: Accounts over, (d) inventory turnover, (e) days' sales in inventory, and (f) days' sales uncollected. Round to receivable turnover, 4.9; one decimal place. Identify the company you consider to be the better short-term credit risk and Inventory turnover, 3.0 explain why. 2. For both companies compute the (a) profit margin ratio, (b) total asset turnover, (c) return on total (2) Ball: Profit margin, 9.2\%; assets, and (d) return on equity. Assuming that each company paid cash dividends of $1.50 per share PE,11.4 and each company's stock can be purchased at $25 per share, compute their (e) price-earnings ratios and (f) dividend yields. Round to one decimal place; for part b, round to two decimals. Identify which company's stock you would recommend as the better investment and explain why